You are on page 1of 2


Summarized balance sheet equation: Assets = Liabilities + Owner’s Equity (Shareholders Fund)
Year Shareholder’s Liabilities (Rs. Cr) Assets (Rs Cr)
Fund (Rs. Cr)
Non-Current Current Total Non- Current Total
Liabilities Liabilities Liabilities Current Assets Assets
2015-2016 54.83 16.95 52.90 69.86 40.7 83.91 124.69
2014-2015 51.48 19.27 44.76 64.04 43.57 71.94 115.52

Total liabilities have increased by 9% with a corresponding increase in assets by 7.9%, and an increase in
shareholder’s fund by 6.5%. One possible reason could be the increase in short term borrowings from the bank
(SBI), unsecured loans from the Director and an increase in current assets.

Value (Rs. Cr) Proportions (in %)
Tangible Assets 40.7152 32.65
Assets Inventories 43.8734 35.18
Trade Receivables 30.5691 24.51
Reserves and Surplus 40.1785 32.22
Long Term Borrowings 14.3199 11.48
Liabilities & Equities
Short Term Borrowings 40.9497 32.83
Share Capital 14.6526 11.75
The company has invested highly in land & machinery which has resulted in 32.65% proportion of tangible assets. 24.51% is
trade receivables that resulted in high short-term borrowings to buy inventories and maintain continuous production flow.
32.22% is Reserve Surplus because company has been generating regular profits.

3. Items missing in the balance sheet:

a. Marketable Securities: Excess cash has not been invested here.
b. Deferred Expenditure: Expenses incurred not in the accounting period, have not been included
Items found interesting:

a. Short term borrowings increased by 36.7%, trade receivables increased by 58%

b. Cash & bank balances increased by 204%, cash in hand increased by 400.5%